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«Principal Editor Professor Brian Fitzgerald Head of School of Law, Queensland University of Technology, Australia With the assistance of Jessica ...»

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The final example, machinima, shows a burgeoning industry in innovative filmmaking techniques. The wide availability of computer games means that these filmmaking techniques are available to a wider range of people, allowing more individuals to express themselves creatively. The manner in which Australian copyright law reacts to machinima will determine the continued viability of the genre. If machinima is held to reproduce a substantial part of the computer game it uses, and there is no open-ended fair use defence available, then copyright owners will have a significant form of control over the content and production of machinima, greatly reducing the utility of the genre as an expressive medium by subjugating it to the interests of copyright owners.

These three issues show an imminent conflict in Australian copyright law.

The Australian courts and legislature could adapt copyright law to encourage these types of creative innovation and play in the digital environment, or they could prohibit them as mere interferences with the copyright owner's property. Which approach will be taken will depend on the recognition of the tension between the rights of copyright owners and the rights of players of computer games. By recognising that copyright law should exist not only to protect investment in the production of intellectual property, but also to encourage further creativity, innovation and social interaction, a balance can be sought which both protects game developers from piracy, and also protects the right of players to play, and the ability of players to express themselves, inside and outside the games.

–  –  –


I am happy to be on this panel because it is a little bit of a reminiscing for me. When I first started working in this area and wrote Code and Other Laws of Cyberspace 256, which was published the very week that I came to Australia for the first time, it was the virtual world’s experience that motivated the central metaphor of the book. It was watching the way virtual worlds in the MUD and MOO context developed that made me start thinking about the relationship between technology and legal policy and that has of course been at the core of a lot of the work since. But today I want to talk about three points, none of which are really about the relationship between technology and policy, but all three come out of a course that I just taught last term with Julian Dibell who was one of the protagonists in my first book, and really come out of watching this field become a serious field in the context of both commercial and, increasingly, regulatory questions. The three points I want to make are first that this is real, despite its moniker ‘virtual’, second that it is common, in the sense that it’s everywhere, not just in virtual worlds, and third, that commercial interests have exactly the wrong intuitions about how to think about this space.

First, that it is real. Some of the most significant work in getting people to see why this is a significant issue has been done by economists who are trying to demonstrate the extraordinary economic wealth that’s being produced in these worlds, in particular Ed Castronova’s work estimating the value of these very virtual worlds, and in some of them the per capita GDP is greater than per capita GDP of Romania, so these are huge economies if you use relatively sophisticated techniques to estimate the value of the stuff being produced in these spaces. And it is not just the value being produced in these spaces; there is a story, which because of legal reasons has never been published, so I am going to vaguely refer to it, breaking all sorts of confidentiality agreements, but if I am vague enough nobody will ever know.

Lawrence Lessig, Code and Other Laws of Cyberspace (1999) Basic Books, New York The story is about a gaming company that got into a lot of trouble because it changed its rules about whether you are allowed to re-sell objects and when they changed their rules, the people who had invested a lot of time making objects and re-selling them said, “you broke our contract”. And somebody went to investigate these people making these claims and they turned out to be located in Mexico and it turned out a company had set up a virtual sweat shop in Mexico, where they brought Mexicans in and had them sitting in front of a computer, clicking 24 hours a day, creating the objects that were then sold on eBay and that that process was profitable.

They were making a huge amount of money by taking these labourers and forcing them to play this game where they produced little objects that were sold in the real world. That is as real an economy as you are going to get anywhere. It has proved to be valuable to hire people to engage in this kind of transaction, and when you begin to add up the amount of wealth being devoted in time in these spaces, it is something that we who think about this from a policy perspective have got to consider much more generally.

That is point one.

Point two, the form of creativity that is going on here, or creation that is going on here, is common in other spheres of social and economic life.

Think about three examples, one the virtual games, where people spend an extraordinary amount of time investing in producing objects of wealth voluntarily. The Trainz example from the last session was a great one about people spending an extraordinary amount of time doing stuff that produces value but they do it voluntarily. They play and it turns out they have the same value as work. This is play as work. That happens also in the context that Eric von Hippel writes about user contributed value to ordinary production processes, as users become inputs into helping design these production processes. That is the one I do not want to talk about much.

The one I want to make the most direct link to is the free and open source software world, where there is an extraordinary amount of value produced by people playing, tinkering around with little objects, that turns out to be like work because it produces really powerful operating systems, or really powerful servers, that ex ante nobody would have expected could have been produced like this. They would have said it was impossible to produce it like this. Intuition would have told you it could not be done, but the lesson to be learned is that the intuitions are wrong. We had better re-think the models that drive the intuitions that show us that these massive, collaborative, voluntary projects cannot work, and we do that by beginning to link the very different contexts in which they are happening and beginning to recognise what makes them work in these very different contexts.

What makes open source or free software projects work? It is all the same kind of questions that are being asked in the context of the gaming communities. It is precisely the same issue. What do you do to both convince people that they have enough ownership of the project to make it feel like they are actually contributing to something that is theirs, while on the other hand, not allowing the feeling of ownership to translate into a commercial transaction so they begin to demand health benefits for the coding in the operating system context, or something like that. It is this weird balance that has to be struck and the fact is it is struck in the most dramatic and amazing context, for example, the new Linux operating system, and increasingly in lots of other contexts like that. If the gamers want to understand, or the game companies want to understand how to make this work, they ought to start looking at these other successful contexts, as well as at the work of Yochai Benkler and Steve Weber in his recent book about the success of open source resources. 257 Third, about the intuitions of these commercial entities: when Julian and I taught this course we were teaching it in Silicon Valley, so we had a great opportunity to bring in the corporate geniuses who thought they were going to make billions of dollars off of these game companies. We had the President of ‘There’ come in. ‘There’ was a gaming company where people contributed a lot of energy to turning this game into something interesting and real and we had some very sharp students in the class, who were extremely sceptical of this man. In ‘There’, there were ‘There’ dollars, ‘There Bucks’ having an exchange value of 17.89 to 1 – $1 got you 1789 ‘There Bucks’. Where does 1789 come from? That is the year the Constitution was ratified in the United States. Everything in ‘There’ was grounded in the idea of America and how great America was.

One student in particular started asking the President of ‘There’ some

questions about the way life was in ‘There’ and so she said:

“When you produce things in ‘There’, who owns what you produce?” “Well, what do you mean?” he replied.

“Well I create something, who owns it?” Steven Weber's The Success of Open Source (2004) is a complement to Yochai Benkler’s classic essay, ‘Coase’s Penguin, or Linux or the Nature of the Firm’ (2002) 112 Yale Law Review 369.

“Well the user licence says that we own it, ‘There’ owns it”.

‘There’ was very famous because they were going to rent out spaces to

Nike, or Sony, so she then said:

“Well when Nike and Sony make things inside of ‘There’, who owns it then?” “Well, of course, Nike owns it”.

“OK” she said, “so you’ve created a world where authors get nothing and corporations get everything?” “Well, yeah. How else would you do it?” And she said, “well the American way”, which was exactly the opposite.

The copyright clause made so authors got it and corporations could not, that was the whole point.

The other great example she hit him with was (she is now a Prosecutor, she

is perfect for this job):

“So do you have the right to free speech in ‘There’”?

He said, “of course, you have the right to free speech”.

“So I can put a poster up on my lands”?

“Absolutely” he replied.

“And I can buy land anywhere”?


“I can buy land next to a Nike store”?


“Can I put a poster up on the land next to my Nike store that says ‘Nike uses Sweat Shop Labor’?” “Er, no, you can’t do that”.

The point was that the natural tendency and attitude of this corporation was to think about these social relations in a purely corporate way, and we have to remember what the essence of a corporation is. As Ronald Coase taught us in his most famous, first, big article, a corporation is a communist organisation, right? A corporation is that space where it is just power that directs what happens inside, and the market place is outside the corporation. When you have this mentality where you own everything inside the corporation and you include your users as part of the corporation, that produces a certain reaction from your users.

Many people will say from this, “then we have to start thinking about corporate responsibility, and are they actually answering their responsibility to their users?” That was the theme of the last panel. I am less convinced that this is an issue because I am convinced there is going to be great competition between corporations here in producing virtual worlds that actually give users what they want, and the ‘There-type’ corporation is going to fail miserably.

‘Second Life’ is an alternate vision of this, which has a different sense of who owns what. I think it will be much more successful. Second Life announced early on that all owners, all users, owned their IP, and then the question was, well how were they going to enable people to share the IP?

They said to us at Creative Commons, ‘why don’t you help us build Creative Commons licences so that inside virtual worlds you can actually share IP according to the Creative Commons licences.’ And that lead to a really brilliant suggestion which they have not implemented yet but we are talking about, which is this: in Second Life, you can be video-camming and while you are video-camming what is inside Second Life the video camera can record or not record on the basis of whether the thing you are taking a picture of is under Creative Commons licence or not.

If you do not license your stuff under your Creative Commons licence as you pan across the room, it is just invisible, but if you do licence with a Creative Commons licence then it is visible, so this is a way of making the licensing stuff ‘real-virtual’ – I do not know what you want to call it – but as real as virtual could be by actually implementing the rules and the way the technology functions, and the expectation was that this dynamic would drive people to be much more open and communal about how they produced and did their stuff with intellectual property because that’s the only way they, literally, would be seen inside this world.

A final point about that consideration: the people who are going to be most successful in these gaming worlds are the people who have been trained in PhDs of the history of liberal societies, you know people who got their PhD from Steven Holmes. Steven Holmes’ whole theory about liberal societies is that societies when they became wealthier only became wealthier because they realised the government needed to exercise less and less power, that this was the paradox of power. That if the government exercised the maximum amount of power, the society was very poor, to the extent the government exercised less power, societies became wealthier. If a President of a corporation recognised the insight that Holmes et al have put forward, and built a virtual world around that insight, we would begin to see a virtual world replicating the kind of growth in wealth that the real world saw when the real world learnt exactly the same lesson.

The ultimate point here is that there is no significant difference between the real world and the virtual world, and the conclusion from that is we ought to start learning lessons in the virtual world which 500 years of history in the real world have taught us.


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